Benefits of Accounts Receivable Automation

accounts receivable automation

Do you know the benefits of accounts receivable automation? Traditionally, a bank lockbox has been used by business Accounts Receivable departments to increase expediency.

Lockboxes have been around for decades and a lot of the traditional bank lockbox's life has been utilized for capturing payment information associated with payments made by check. Commercial banks provided this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Customers generally leverage the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are purposefully placed in a central location to decrease mail delivery time, which also assists with lowering the business’ Days Sales Outstanding (DSO). Banks receive the paper check, process it along with the remittance data and send the data back to their customer. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their productivity. The cost of the bank lockbox is usually a monthly cost along with a per line remittance data processing cost. To process a huge number of checks over time can be pricey with a lockbox.

Today, we see a big shift with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Shortcomings of a Traditional Bank Lockbox



The lockbox often is rather expensive . Banks usuallyacquire a monthly fee along with a per line fee connected toprocessing payment remittance detail .

Lockboxes can include security concerns . The standard bank lockbox still requires a fair measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the bank or an outsourced contractor . The data from the lockbox provides all required components to generate a fraudulent check .

Lockboxes don’t connect into your accounting system . Bank lockboxes process your payments and remittance information thenforward you the information . Your team still must key in that data into your ERP to clear the cash .

Traditional Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Companies are modernizing their AP Department to get rid of manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose firms in a cost efficient scalable alternative for automating Accounts Receivable .

Advantages of a FinTech more info Lockbox
Reduced Cost


The main goal of the FinTech Lockbox would be to reducecost per transaction and provide an Accounts Receivable automation program to letbusinesses to QUICKLY clear cash and improve use of your working capital .

Simple payment trail
It is simple to track incoming ePayments in one location. Instead of flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox provides you with a single destination to house All of your incoming electronic payments created for more rapid cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee through the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a productof the past . The increasing amount of electronic payments embracing FinTech Lockboxes with a major focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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